Short Takes: Ordinary People

It’s perfectly OK to be average — unless, it seems, you’re looking for a job in a warehouse. Preliminary results of a study conducted by Miami University and the Warehousing Education and Research Council (WERC) show that 76% of 50 private warehouses surveyed have trouble finding high-quality employees, and consider this factor their top operational challenge. Retaining effective workers comes in a close second, with 59% citing this as a major problem.

People-related concerns rank higher on the list of challenges than such traditional indicators of performance as meeting goals for order accuracy (41%) and on-time delivery (33%). Forty-six percent of respondents report difficulty with managing hourly labor and recruiting skilled management — which might well explain why a significant number of warehouses find it tough to manage inventory effectively (54%) and run an efficient operation (52%). Technology, touted as the savior of many a business, ranks fairly low on respondents’ roster of concerns: Only 22% say that having state-of-the-art IT is important.

On the upside, respondents report a strong emphasis on monitoring warehouse performance, with 93% tracking and reporting costs. However, the level of detail at which they do this varies. Sixty percent include corporate and logistics overhead costs in their assessment. Sixty-five percent measure warehouse cost as a percentage of sales, but fewer than half (41%) track cost per order and handling charges per case. Those who keep tabs on total annual warehouse cost are even fewer, amounting to 39% of survey respondents. Just one-fifth of private warehouses allocate warehouse cost to products and track storage cost per case.

Using space creatively is a key measure of warehouse efficiency, but 20% of respondents do not use all available storage space. The average facility assigns 49% of its space to storage; 16% to aisles; 15% to picking areas, 12% to staging areas; 3% each to cross-docking and reworking; and 2% to other uses.

For more information, contact WERC at 1100 Jorie Boulevard, Suite 170, Oak Brook, IL 60523; phone: (630) 990-0001; e-mail: wercoffice@werc.org.

Puttin’ On the Ritz

PRIVATE WAREHOUSE PERFORMANCE
Order accuracy 96.9% of orders
Damage
Orders damaged 3.1%
Inventory damaged 1.0%
Timeliness
Orders shipped on time 95.8%
Warehouse order cycle time 4.0 days
Annual inventory turns 10.1 turns
Warehouse G&A to wholesale cost 28.6%
Available storage space used 80.0%
Source: WERC

A Day in the Life

WAREHOUSE ACTIVITY % OF
TOTAL HOURS
Putaway/picking orders 47%
Packing and palletizing 10%
Loading vehicles 10%
Unloading vehicles 8%
Replenishing pick slots 7%
Labeling 5%
Returns processing 4%
Quality inspection 3%
Repair damage/repack 2%
Kit assembly 1%
Product assembly 1%
Other activities 2%
Source: WERC

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